Markets fall as IT companies drag on Cognizant guidance

Written by Press Trust of India | Mumbai | Updated: Aug 8 2014, 08:27am hrs
Stock markets on Thursday fell for the second straight session with the Sensex slipping over 76 points to 25,589.01 and the Nifty falling nearly 23 points to 7,649.25 on losses in domestic IT shares after global peer Cognizant cut its full-year sales growth forecast.

With over 1.5% fall each, heavyweights Infosys and TCS lead the losses in both benchmark indices. Weak global cues also persisted as Asian markets mostly dipped as concerns over the European economy and international conflicts, including in Ukraine, grew, said brokers.

BSE 30-share moved erratically in a range of 25,778.05 and 25,526.05 before settling at 25,589.01, a fall of 76.26 points or 0.30%. On Wednesday, it had plunged 242.74 points or 0.94%.

Similarly, the 50-issue CNX Nifty of the NSE also gyrated in a range of 7,708.95 and 7,630.40 before concluding down by 22.80 points or 0.30% at 7,649.25. It had slipped by 74.50 points or 0.96 % in the previous session.

US-headquartered Cognizant, which has a large employee force in India, on Wednesday lowered its 2014 year revenue guidance to at least 14% from 16.5% earlier.

This sparked off worries IT sector may face challenges ahead. Infosys and TCS were the top losers from the Sensex with fall of 1.68% and 1.56%, respectively. The sectoral BSE-IT and BSE-Teck indices were the biggest lowers, dropping by 1.27% and 1.14%, respectively.

Banking, realty, power, capital goods, healthcare, metal and FMCG sector stocks also came under selling pressure.

Bucking the overall weak trend, shares of companies related to railways saw buying interest after the government yesterday approved FDI liberalisation in the sector.

Shares of some defence equipment makers initially moved up but succumbed to selling. The Cabinet on Wednesday cleared the proposal for raising FDI limit in defence to 49%.

Second-line stocks were also on the selling list. A mixed closing in the other Asian markets and a lower opening of European markets on signs of deepening Ukraine crisis also dampened trading sentiments, brokers said.

Meanwhile, Foreign portfolio Investors bought shares worth R283.87 crore on Wednesday.